THE STRATEGIC MINDSET

Transcription

1 the THE STRATEGIC MINDSET APPLYING STRATEGIC THINKING SKILLS FOR ORGANIZATIONAL SUCCESS

2 Strategy and its consistent application by managers and leaders are keys to long-term organizational success. Strategy is an essential component of strategic thinking, a necessary skill for leaders and one that s highly sought after by employers.1 Being able to think strategically about the big picture and make reasoned decisions that will drive employees in the organization in a common direction means leaders can contribute to business goals. Yet many managers are unclear on exactly what is and isn t strategy, and how to explain it to others or know how to apply it to their daily activities. Recently promoted leaders especially might struggle during the transition to their new role, relying on what s worked in the past and focusing on short-term tactics. This may have proven successful in their previous role, but might not be what the organization needs from them now. Organizations may understand the need for strategic thinking, but few have the right tools in place or the necessary skills to leverage strategic thinking into an enterprise-wide capability for competitive advantage. To gain a better understanding of the current state of strategy skills at organizations, the Human Capital Media Research and Advisory Group the research arm of Chief Learning Officer partnered with the Strategic Thinking Institute for the CLO Strategy Skills survey. We asked survey respondents about the degree to which managers at their organization understand strategy, if they can communicate and apply strategy, and the extent of current measurement of their organization s strategy implementation, application and impact. DEMOGRAPHICS For full demographics information, see Appendix. The CLO Strategy Skills survey received 400 responses. KEY FINDINGS Strategic thinking is the most important leadership capability for senior executives (No. 1 response at 63.7 percent). Strategy skills are taught at just 24.1 percent of organizations. Only 31.9 percent of respondents said they teach their managers how to facilitate strategy conversations. Only 44.3 percent of organizations have a universal definition of strategy, while only 46 percent have a common language for strategy percent of respondents believe managers at their organizations would benefit from a greater selection of thinking and planning tools and models to help them develop strategy. 1Weisser, C. (2016). The 21 Most Valuable Career Skills. Money. 2 THE STRATEGIC MINDSET: APPLYING STRATEGIC THINKING SKILLS FOR ORGANIZATIONAL SUCCESS

3 STRATEGY: WHAT IS IT? Before we examine best practices for strategic thinking, we should step back and take a big-picture view. Do organizations have a common definition or understanding of what strategy is? Not many survey respondents believe so. Having a definition is essential for giving employees an understanding of how strategy differs from the mission, vision, goals, objectives and tactics. Yet less than half of respondents believe their organizations have either a universal definition (44.3 percent) or a common language (46 percent) for strategy. Where then to begin? Strategic thinking unleashes the power of managers to solve problems, overcome challenges and creatively take the business from where it is to where it needs to go. What are the characteristics of strategic thinkers? Among other things, employees who regularly think strategically generate insights on how to create new value, are able to make trade-offs with their resources and effectively prioritize their activities. To create a universal definition, organizations should start with the Strategic Thinking Framework (Figure 1). The framework consists of three A s: acumen, allocation and action. Acumen is where all projects start the idea that will lead to new value either for the customer or the organization. Having acumen requires strategic insight being able to identify opportunities or solve problems to create and deliver new value. Rich Horwath, CEO, Strategic Thinking Institute Once the idea has been identified, organizations can move on to the second A: allocation. Budget, resources, people and time should all be considered at this stage. Allocation should reflect strategic innovation as leaders identify new ways to allocate resources that will deliver value for their customers. After resource allocation is determined, organizations can then act on the program or initiative. By focusing strategic thinking through the lens of the framework, organizations free their managers up to focus on the important tasks and not get distracted by fire drills.2 This last part is key: strategy is not tactics, yet only a third of survey respondents (33.2 percent) are teaching their managers how to recognize the difference between strategy and tactics. FIGURE 1: STRATEGIC THINKING FRAMEWORK 2 Horwath, R. The Strategic Thinking Manifesto. Strategic Thinking Institute. 3 THE STRATEGIC MINDSET: APPLYING STRATEGIC THINKING SKILLS FOR ORGANIZATIONAL SUCCESS

4 PUTTING STRATEGY IN THE CORPORATE CLASSROOM For organizations to be able to realize the benefits of strategic thinking, they ll need to include strategy skills in their leadership development programs. There is plenty of room for improvement in this area, as less than a quarter of all organizations (24.1 percent) answer Yes on if their organization teaches strategy skills (Figure 2). My company does not have strategic thinking and planning tools in place. Any tools are learned on the job according to whom and what the director s leadership style is. Organizations looking to develop a strategy skills program can look to what others are doing for inspiration. Who benefits most from strategy skills training? Organizations mostly teach strategy skills to middle- and upper-level managers. Strategy skills are often taught to managers (40.6 percent), directors (42.9 percent) and vice president-level senior leaders (41.4 percent). Common elements in leadership development include how to think strategically, articulate the organizational strategy and apply it to teamwork (Figure 3). Survey respondent, CLO Strategy Skills survey, open comments FIGURE 2: ARE STRATEGY SKILLS TAUGHT AT YOUR ORGANIZATION? FIGURE 3: ELEMENTS INCLUDED IN STRATEGY EDUCATION Yes To some extent No How to apply the organizational strategy to department/teamwork 65% 42% How to articulate the organizational strategy How to think strategically 60% 54% 24% How to use strategy to prioritize tasks 53% 34% How to build buy-in for organizational strategy within the department/team 45% 4 THE STRATEGIC MINDSET: APPLYING STRATEGIC THINKING SKILLS FOR ORGANIZATIONAL SUCCESS

5 PROVIDING THE RIGHT TOOLS There s overwhelming support for managers benefitting from a greater selection of thinking and planning tools and models to help them develop strategy. More than 8 in 10 survey respondents (83.4 percent) agree with this statement (Figure 4). One of the greatest tools for strategic thinking is deceptively simple: time. Strategy development takes time to focus on new, unproven areas that will bring value to the business. Leaders need uninterrupted time to both develop their necessary skills and concentrate on strategic tasks. [At our organization, the] emphasis is on short-term results, which is reinforced through behaviors and practices of senior leadership. Long-term work is not Yet finding time is a challenge for many, with 65.9 percent of survey respondents saying the lack of time to engage in strategic skills development is a top challenge to increasing strategy skills. Other challenges include a lack of training on strategy skills and lack of a framework for creating strategic thinking habits (Figure 5). viewed as a manager s role. Survey respondent, CLO Strategy Skills survey, open comments FIGURE 4: MANAGERS AT OUR ORGANIZATION Would benefit from a greater selection of thinking/planning tools/models to help them develop strategy 83% Use goals and strategies to drive their daily activities Effectively set clear priorities and don t prioritize everything as important Can clearly differentiate between strategy and mission vision, goals, objectives and tactics 56% 49% 41% FIGURE 5: TOP ROADBLOCKS TO INCREASING STRATEGY SKILLS AMONG MANAGERS Lack of a framework to create a habit of strategic thinking Lack of available time to engage in strategic skills development Lack of training on strategy skills among managers Lack of understanding of what strategy really is and how to create it Lack of a clear definition of strategy among managers 66% 66% 62% 53% 52% 5 THE STRATEGIC MINDSET: APPLYING STRATEGIC THINKING SKILLS FOR ORGANIZATIONAL SUCCESS

6 COMMUNICATION IS KEY For strategic insight to contribute to organizational success, leaders need to embrace and facilitate strategy conversations, which help them solve their key business challenges. Yet there is much room for improvement in this area; only 31.9 percent of respondents said they teach their managers how to facilitate strategy conversations. The potential value of strategic thinking and planning are dramatically reduced when managers are not able to effectively communicate their strategic insights with one another (Figure 6). Q: What is one action you d like to see your organization take in the next year to improve strategy for managers and leaders? How should managers communicate to be more strategic? Including overarching themes in both written and verbal communications helps the audience connect with the upper-level message. Strategy conversations should be focused on higher-level priorities, not bogged down in tactical details. A: Cascade strategic capability and thinking to middle and lower management levels. A: Set up a common language and framework that is consistent across our functional areas. A: Make this part of the leadership training culture at ALL levels. Survey respondents, CLO Strategy Skills survey, open comments FIGURE 6: STRATEGIC COMMUNICATION AT OUR ORGANIZATION Managers can articulate the objective, scope and advantage of the business in a single statement There is a common language for strategy throughout my organization Cross-functional groups coordinate to effectively align their strategies and resolve conflicts 42% 46% 50% We teach our managers how to facilitate strategy conversations 32% 6 THE STRATEGIC MINDSET: APPLYING STRATEGIC THINKING SKILLS FOR ORGANIZATIONAL SUCCESS

7 THE MOST IMPORTANT LEADERSHIP CAPABILITY Make strategy skills mission critical for the organization by engaging senior leaders as champions and using L&D to drive strategy skills learning programs across the organization. Organizations looking to reinforce strategy skills should build strategic thinking into their leadership development programs, to ensure that current and future leaders have the tools they need to develop and execute strategic Survey respondent, plans. Strategic thinking is especially crucial for new managers, who may not be CLO Strategy Skills survey, open ready to give up their old tactical duties. Half of all organizations (49.9 percent) comments agree that managers who aren t strategic enough focusing instead too much on the tactical aren t likely to advance their careers. In addition, most organizations (63.7 percent) believe the ability to think strategically and set direction is the most important leadership capability for senior executives. Thus, developing leaders strategic capabilities demonstrates commitment to employee development. By giving leaders the tools and direction they need, managers will spend less time firefighting (reacting to every issue the minute it crosses their desk) and more time using goals and strategies to drive their daily activities (Figure 7). FIGURE 7: MANAGERS AT OUR ORGANIZATION... Use goals and strategies to drive their daily activities Articulate to others how tasks relate to strategic goals Spend time on strategic tasks rather than firefighting 28% 43% 56% 7 THE STRATEGIC MINDSET: APPLYING STRATEGIC THINKING SKILLS FOR ORGANIZATIONAL SUCCESS

8 CONCLUSION Good strategy can move organizations in new directions and open them up to new markets and possibilities. The opposite is also true: bad strategy can sink a business. Organizations should ensure their managers, directors and senior leaders have the same definition of strategy, know what the strategic direction is for their organization and are able to apply strategic thinking to their department or teamwork. The Strategic Thinking Framework is a good place to start when deciding on a common approach to strategy. Once there is a consistent definition of strategy enterprise-wide, organizations should Rich Horwath, CEO, include strategy skills into their leadership development programs. Survey respondents Strategic Thinking agree: leaders would benefit from more tools and models to help them develop strategy. Institute Strategy should be communicated throughout the organization by teaching leaders how to facilitate strategy conversations and clearly translate strategy to their teams. Finally, leaders should recognize that strategy more so than tactics will advance both their career and organizational goals. By making strategic trade-offs and focusing on only a few priorities, leaders will envision the big picture and be better equipped to handle change and challenges as they arise. APPENDIX Glossary Strategic innovation Insight-based resource allocation that will create value for target customer segments. ABOUT Strategic insight A new idea combining two or more pieces of information that will positively affect business success and provide competitive advantage. Strategic Thinking Institute The Strategic Thinking Institute is dedicated to helping managers at all levels develop their strategic thinking and planning capabilities to grow profits and create competitive advantage. Founded by New York Times bestselling author on strategy Rich Horwath, STI has worked with world-class companies in the U.S., Europe and Asia-Pacific to build enterprise-wide strategic capabilities, facilitate strategy conversations and set strategic direction. Horwath s two most recent books are Deep Dive: The Proven Method for Building Strategy and Elevate: The Three Disciplines of Advanced Strategic Thinking. Visit for resources on strategic thinking and planning, including white papers, videos, podcasts, infographics and to sign up for the free monthly newsletter Strategic Thinker. For inquiries, contact Rich Horwath, CEO: Rich@StrategySkills.com. Strategic planning Channeling insights into an action plan to achieve goals and objectives. When you think about the pace of change in most industries and the increasing level of competition due to digital factors and changing business models, strategic thinking is no longer a nice to have, it s a must-have. Strategic thinking The generation of insights to achieve advantage. 8 THE STRATEGIC MINDSET: APPLYING STRATEGIC THINKING SKILLS FOR ORGANIZATIONAL SUCCESS

9 Chief Learning Officer Chief Learning Officer is the foremost resource in the rapidly growing industry of workforce learning and development. The flagship magazine and related network of publications, electronic media and international events have made Chief Learning Officer the pre-eminent source of thought leadership for senior-level executives. The magazine provides them with constant access to reliable, relevant information, as well as forums for connecting with other global learning leaders. Learn more at Human Capital Media The Human Capital Media (HCM) Research and Advisory Group is the research division of Human Capital Media, publisher of Chief Learning Officer, Talent Economy and Workforce magazines. The Research and Advisory Group specializes in partnered custom content solutions customizable and proprietary deliverables that integrate seamlessly with existing marketing programs. Our proprietary Talent Tracker data service gives practitioners point-of-need data analytics access to inform strategic HR decisions. By leveraging access to senior-level decision-makers and identifying industry trends, the HCM Research and Advisory Group can deliver keen insight into all areas of L&D, talent and HR. For inquiries, contact Sarah Kimmel, vice president: DEMOGRAPHICS Figures may not total 100 percent due to rounding Survey dates September-November 2017 Respondents 400 Organizational level of respondents 43.5 percent of respondents are at or above director level Organization size < 100: 20.3 percent : 15.5 percent : 8.1 percent 1,000-4,999: 20.6 percent 5,000-9,999: 9.1 percent 10,000-24,999: 13.2 percent > 25,000: 13.2 percent Geographic distribution One country, one location: 30.6 percent One country, multiple locations: 36.4 percent One country, some global distribution: 13.1 percent Highly distributed: 19.9 percent 2018 Strategic Thinking Institute. All rights reserved. 9 THE STRATEGIC MINDSET: APPLYING STRATEGIC THINKING SKILLS FOR ORGANIZATIONAL SUCCESS

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